Market Research Analyst

Global LNG Market - Overlooked Opportunities in Infrastructure Security

Market Research Analyst — Thu, 31 Jul 2008 18:04:36 +0000

Rising energy prices have drastically increased world’s demand for Liquefied Natural Gas (LNG). LNG is one of the critical components of the global energy market that has enough flexibility of supply to meet huge run-up in global energy demand. The next few years will witness fast development of the global LNG infrastructure, with number of LNG terminals nearly tripling.

Fast development of LNG market will drive growth in a niche lucrative market segment – security of LNG infrastructure. As the frequency of LNG tanker shipments increases, and new LNG terminals are built, the issue of LNG infrastructure security becomes one of the national security priorities. The LNG infrastructure is extremely vulnerable to a terrorist attack, which if successful, could have catastrophic results both in terms of lives lost and economic impact.

There is a widening gap between LNG infrastructure development and awareness of the security establishment of this emerging market niche. Establishing and strengthening LNG infrastructure security include many challenging tasks:

Securing both landside and waterside perimeter
Providing security of LNG tanker in the port
Providing security of LNG shipments on high seas

These tasks are concerns of both private and governmental sector. To calm down public fears and secure energy supply the private and governmental sectors will invest whatever it takes in LNG infrastructure security. The LNG infrastructure security market is robust and well poised for growth over the forecast period. It is forecasted to grow from $1.5 billion in 2008 to $4 billion in 2014 .

HSRC’s report LNG Infrastructure Security Market 2008 – 2014 analyzes trends and opportunities in this lucrative niche market by countries, missions and technology segments.

How do you find market research for your business?

Market Research Analyst — Sun, 06 Jul 2008 21:17:19 +0000

We suggest market research professionals to ask “How did you find us?” when a customer calls them. Thousands of professionals working in the market research industry rely on our surveys for an accurate and unbiased inside look at the industry. Are our marketing efforts paying off? Are we reaching customers from a magazine ad, word of mouth, or your web site? Please help to 65,000 professionals in the market research industry to learn the best ways to supply you with latest market intelligence.

Global Energy Infrastructure Security Market - $30 Billion over next 6 years

Market Research Analyst — Thu, 19 Jun 2008 13:05:04 +0000

According to a recent announcement of Homeland Security Research Corporation the world will spend $30 Billion in 2009 -2014 to protect energy infrastructure.

The following sectors are forecast to be fast growing markets: oil industry security, LNG infrastructure security, U.S. power grid security.

17% of Cyberterror Attacks Originate in China

Market Research Analyst — Sat, 31 May 2008 14:01:50 +0000

According to Akamai Technologies’ State of the Internet report, China has emerged as the world’s leading cyberterror superpower leading in (DDoS) attacks, hacking attacks, spamming and virus attacks.

Akamai observations during the first quarter of 2008 show traffic originating from 125 unique countries around the world. China and the United States were the two largest traffic sources, accounting for some 30% of traffic in total. The top 10 countries were the source of approximately three quarters (75%) of the attacks measured.

Internet Advertising is Recession Proof

Market Research Analyst — Sat, 31 May 2008 13:33:50 +0000

via Business Wire - According a recently released IDC’s study U.S. Internet Advertising 2008-2012 Forecast and Analysis: Defying Economic Crisis Internet advertising in the United States will continue to grow fast even if recession will lead to a contraction in ad spending overall, essentially accelerating the transfer of marketing budgets from the traditional media into the new. During the forecast period, Internet advertising will grow about eight times as fast as advertising at large. IDC predicts overall Internet advertising revenue will double from $25.5 billion in 2007 to $51.1 billion in 2012.

The Internet will go from the number 5 medium all the way to the number 2 medium in just 5 years, making it bigger than newspapers, bigger than cable TV, bigger even than broadcast TV, and second only to direct marketing. Video advertising will be the principal disruptor of Internet advertising over the next five years by attracting the most new marketing dollars. Its revenue will grow sevenfold from $0.5 billion in 2007 to $3.8 billion in 2012 at a compound annual growth rate (CAGR) of 49.4%. This growth will take place because brand advertisers will shift significant amounts of money into these video commercials, primarily from broadcast television and to a lesser extent from cable television.

Search advertising will remain the one advertising format that will garner the most revenue over the forecast period in the United States. This means that for any media company, search must be a key part of its strategy. Any media company that is not Google cannot ignore this segment even if Google is towering above all others as segment leader with about 70% share of the segment’s revenue.

Oil-Related Transfers of Wealth

Market Research Analyst — Wed, 14 May 2008 14:40:44 +0000

Oil-related wealth transfers have helped create growing sovereign wealth funds in many of the oil exporting nations, including countries such as the United Arab Emirates, Saudi Arabia (see Saudi Arabia Homeland Security Market Outlook - 2009-2018), and Venezuela. These funds are impacting capital markets and may allow their governments to purchase strategically significant firms in whole or part in many countries, including the United States. While some of the largest sovereign wealth funds are operated by countries that are not primarily natural resource exporters (e.g. China and Singapore), the top ranks are dominated by the oil-rich countries, such as the United Arab Emirates, Saudi Arabia, Kuwait, Russia, Brunei and Qatar.

Source:

Oil Energy Fact Sheet
Saudi Oil Industry Security Market

Impact of the U.S. Ethanol Industry on the Price of Corn

Market Research Analyst — Tue, 13 May 2008 04:36:19 +0000

Below is the testimony of Bruce A. Babcock, Director of the Center for Agriculture and Rural Development, Iowa State University, made at the hearing of the U.S. Senate Committee on Homeland Security and Governmental Affairs. The subject of the hearing is how fuel subsidies impact food supply.

What would happen to the price of corn if we were to eliminate the U.S. ethanol industry? But this answer does not give any insight into the central question relevant to today’s hearing. Namely, what would happen to the price of corn if Federal biofuels policies were changed? We must recognize that U.S. ethanol plants will not disappear because of a change in U.S. ethanol policy. The plants will remain operating as long as they are covering their operating expenses. Thus, a change in U.S. policy will not cause corn prices to drop by half.

U.S. Biofuels Policies

There are three Federal policies that I want to examine. They are the Renewable Fuels Standard, the blenders’ tax credit (Volumetric Ethanol Excise Tax Credit), and the tariff on imported ethanol. Changes in these three policy tools will have both short- and longrun impacts on the price and availability of ethanol, corn, and other agricultural products. The blenders’ tax credit increases gasoline blenders’ ability and willingness to pay for ethanol. Currently the tax credit is set at $0.51 per gallon. The effect of the tax credit is to increase the market price of ethanol, thereby increasing the profitability of ethanol production, which in turn increases the volume of ethanol, the amount of corn processed, the price of corn, and the volume of ethanol byproducts. Over the long run the blenders’ tax credit has had a large effect on the size of the ethanol industry. The short-run impacts of the tax credit are modest because in the short run, the number of ethanol plants in existence is fixed.

The import tariff taxes imported ethanol. Hence, it decreases the attractiveness of exporting ethanol to the U.S. market because the net price received for U.S. sales is the U.S. market price for ethanol minus the tariff minus shipping costs. Currently, the tariff
consists of a 2.5% sales tax plus a tax of $0.54 per gallon. The effect of the tariff is to drive a wedge between Brazilian ethanol prices and the U.S. price. If you reduce the tariff, more Brazilian ethanol would flow to the U.S. market, thereby reducing today’s
large price difference.

The Renewable Fuels Standard in the Energy Independence and Security Act (EISA) specifies minimum biofuels consumption levels for the United States. In 2008, mandates total 9 billion gallons. In 2009 the mandate increases to 10.5 billion gallons. The shortrun
effect of a mandate is zero if biofuels consumption is greater than mandated levels. That is, removing a non-binding mandate would have no effect. In the long run, the EISA mandates have created a strong expectation that biofuels production will expand to at least the levels dictated by the mandates. This expectation for robustly growing future demand for corn has increased the futures price of corn in 2010 and 2011, which has likely had some effect on the price of corn today.

Direct Impacts on Ethanol and Corn from U.S. Policies

It is important to separately evaluate the near-term impacts of Federal policy from longterm impacts. Given the level of concern about current crop prices, I want to examine the short-term impacts first. To give us a good grasp of the magnitudes of the effects, I will cite some results from a model I developed jointly with my graduate student, Lihong Lu McPhail, that looks at what would happen to the supply of ethanol and the market price of corn during the period September 1, 2008 to August 31, 2009, which is the reporting period for how the 2008 corn and soybean crops are sold. A focus on corn is warranted
because it is the crop most directly affected by U.S. biofuels policies and it is the crop that most determines the impacts on the cost of food because of its importance in determining the cost of feeding livestock.

Taking into account that we cannot know for certain how many ethanol plants will be ready to produce ethanol next year, what the size of this year’s corn crop will be, what the price of crude oil will be, and how much corn and other crops will be produced in
other countries, we estimate that under current Federal biofuels policies, expected ethanol production is about 10.8 billion gallons, the expected price of ethanol is $2.44 per gallon, and the expected price of corn is $5.68 per bushel. We then asked the following
question: What would happen to ethanol prices and volume and the price of corn next year if Federal policies were changed? We considered a number of different scenarios, but I want to focus on three today. These are 1) eliminate EISA mandates, but keep the tax credit and the import tariff; 2) eliminate the import tariff and the blenders’ credit, but keep the mandate; and 3) eliminate all three Federal instruments. Our findings are presented in Table 1.

Because the blenders’ tax credit and mandate both serve to increase the demand for ethanol, elimination of only one of these policies would have little impact. Elimination of the mandate would reduce expected ethanol production by about 4%, the ethanol price would drop by less than 2%, imports would fall by 18%, and the price of corn would fall by slightly more than 1%. Maintenance of the $0.51 tax credit keeps demand for ethanol high, and the import tariff keeps imports down. The impacts of removing only the $0.51 blenders’ tax credit would be similarly small, because the mandate would keep ethanol demand high and the import tariff would ensure that the mandate is met with domestically produced ethanol.

Elimination of the blenders’ tax credit and the import tariff would have larger impacts because increased imports would reduce the amount of domestic ethanol that would be needed to meet the mandate. However, the supply of ethanol from Brazil is not limitless.
We estimate that imports would more than double with elimination of the tax credit and import tariff, domestic ethanol production would decline by about 11%, and the price of corn would drop by 7%. The price of ethanol would drop by 13%. The price of blended fuel would not drop because decreased ethanol production would allow gasoline prices to increase. The impacts are not larger because the mandates keep total ethanol demand high and the existence of constructed U.S. ethanol plants keeps total corn demand high.

A rollback of all ethanol incentives and protection would have larger impacts. Ethanol production would drop by 21%. A drop of this magnitude in production would normally be expected to increase price. But the price for ethanol is enhanced by the tax credit and
mandate under current policy so this drop in production would be accompanied by an 18% drop in the ethanol price. Imports would increase modestly because the decline in the tax credit is less than the decline in the import tariff. The expected corn price would
drop by almost 13%, to just below $5.00 per bushel.

The livestock industry and its supporters have been most vocal in their calls for a rethinking of Federal ethanol policy. But high gasoline prices combined with existing ethanol plants means that corn prices in the near term will remain well above historical
levels even if the mandate, the blenders’ tax credit, and the import tariff were all eliminated. This is not to say, however, that the 13% drop in corn prices would not affect livestock margins and, eventually, food prices. This drop in corn prices would reduce the
cost of feeding beef cattle by 5% of revenue, hogs by 7% of revenue, laying eggs by 4%, and dairy cattle by 3% of revenue. This drop in production costs would eventually translate into consumer prices that would be lower than they otherwise would be.

The longer-term impacts of a change in Federal biofuels policy depends crucially on the price of crude oil and on the number of ethanol plants that get constructed under current incentives. For example, if we were to eliminate all Federal biofuels policies today, and future crude oil prices support wholesale gasoline prices of $3.00 per gallon in the future, then ethanol production over the next five years or so would eventually increase to around 14 billion gallons, ethanol prices would be $2.00 per gallon, and corn prices would be about $4.00 per bushel. A return of wholesale gasoline prices to $2.00 per gallon would result in ethanol production of about 10 billion gallons, an ethanol price of about $1.60 per gallon, and corn prices would fall to approximately $3.60 per bushel. Incontrast, sustained $4.00 gasoline prices would result in $2.40 ethanol, $5.00 corn, and 21 billion gallons of ethanol.

These results reveal two general findings. First, agricultural commodity prices and gasoline prices are now inextricably linked through existing ethanol plants and the knowledge of how to efficiently convert corn to transportation fuels. This means that for
the foreseeable future, even if we were to eliminate all support for corn ethanol, the price of corn and crops that compete with corn for land will rise or fall directly with transportation fuel prices. Second, in the long run, if high gasoline prices signal that we
need alternative fuels, the corn ethanol industry will be there to contribute substantial amounts of transportation fuels even without government subsidies. As in any unsubsidized market, the amount that corn ethanol would contribute would depend on the
relative competitiveness of the industry.

Impacts on Other Commodities and Food
The need for more corn to meet both the demands of the corn ethanol industry as well as food and feed demand means that fewer acres of other crops will be planted as corn acreage is expanded. The drop in U.S. acreage of other crops will cause their prices to
increase. The most direct competitor to corn for land is soybeans. We have seen how this competition can have dramatic impacts on both corn and soybean prices as users of both commodities offer higher prices to ensure adequate supplies of “their” crop. The
impact on crops other than soybeans is less pronounced because corn competes less directly for land. Wheat acreage will be influenced to some degree by corn prices because of land competition with soybeans and, in some regions, corn. U.S. rice acreage
will be largely unaffected by corn prices because corn and rice are grown in different regions and it takes a fairly large incentive to move rice producers away from rice. The direct link that many people have made between U.S. biofuels subsidies and rice prices
is, therefore, extremely difficult to find or defend.

With regards to food prices we must remember that, to a large extent, Americans do not eat agricultural commodities. Rather we eat food manufactured from commodities. Wheat gets combined with labor, energy, and other ingredients into bread and pasta.
Corn and soybean meal gets similarly transformed into meat, eggs, milk, and cheese. My colleagues and I estimated that a 30% change in the price of corn, along with corresponding changes in the prices of other crops, would change home food
expenditures by about 1.3%. This estimate could be on the low side because we did not account for indirect changes in prices caused by competition for land for fruit, vegetables, and minor crops.

As shown in the table of short-run results, altering U.S. biofuels policies will change the price of corn by much less than 30%. This suggests that changes in biofuels policies will not dramatically affect the price that Americans will pay for food.

Commodity prices make up a much larger share of the consumer food dollar in many poor countries. Thus any change in commodity prices brought about by a change in U.S. biofuels policies would have a much larger impact on food prices than in the United
States and other rich countries.

Some may find these estimates of the effect on U.S. food prices not credible because of the huge run-up in wheat, rice, and feed costs over the last 18 months. But again, I have not tried to determine the impact on food costs from increasing agricultural commodity prices. Rather I am asking what the impact would be on commodity prices from a change in Federal biofuels policies given that we are well on our way to having more than 11 billion gallons of plant capacity and that markets expect high gasoline prices for the foreseeable future. This combination of in-place capacity and high-priced gasoline implies modest impacts of a change in policy.

Impacts on International Markets

Finally, I would like to include a few comments about international markets. The United States is a major exporter of corn, soybeans, wheat, and rice. Changes in U.S. supply and demand directly impact international prices. Thus, to the extent that changes in Federal biofuels policies affect U.S. prices, international markets would be similarly affected. Again, corn and soybean prices would be most affected by a change in Federal policy. Wheat prices would be affected less. Rice prices would be largely unaffected for two reasons. First, the U.S. share of world rice exports is lower than for corn, soybeans, and wheat, and second, rice acreage does not compete as directly for corn acres as do soybeans and wheat.

In conclusion, there is no doubt that the growth of the ethanol industry is an important factor in the run-up in agricultural commodity prices. But this does not imply that a change in Federal policy would reverse this growth. My testimony about the long-term impacts on the price of corn and related commodities is based on simple arithmetic: existing ethanol plants will operate at nearly full capacity if they can cover their operating costs; under-construction plants will get finished if it makes financial sense to finish them; and new plants will be constructed if market prices dictate. Thus, unless we have a return to $40 or $50 crude oil, we can expect the price of corn to be well above historical levels for the foreseeable future even if all support for corn ethanol were eliminated.

The full document, including Table 1, is available here.

Saudi Arabia Moves Agriculture Abroad

Market Research Analyst — Mon, 12 May 2008 15:35:26 +0000

Saudi government moves agriculture abroad by investing in farming of staple commodities in Thailand, Brazil, India and other countries. This move represents a classic case of “absolute advantage” economy. At the current high energy prices it makes all sense for Saudis to get rid of heavily subsidized agriculture sector burdened by huge costs of desalinated water and to focus investments on oil and gas production. Saudi Arabia plans to increase wheat and rice exports. This is the first step in abandoning “self-sustainability” program which lasted for 30 years and completely failed to deliver agriculture products at costs approaching market prices. Saudi Arabia is already the world’s sixth largest importer of rice.

While the decision to abandon domestic farming has been ripening for a long time, it has been hastened by India’s ban on exports of non-basmati rice. In 2007 Saudi Arabia imported about 1 million tonnes of rice.

By investing in farming abroad Saudi Arabia strives to keep control over security of its food supplies, quite expected step for country obsessed with national security (for more information see Saudi Arabia Homeland Security Market Outlook - 2009-2018).

Saudi Arabia: New Infrastructure Projects

Market Research Analyst — Sat, 10 May 2008 06:12:14 +0000

Growing oil revenues spur investments in Saudi infrastructure:

$3 billion aluminum project at Jazan Economic City developed by MMC Corp., Aluminum Corp. of China Ltd. and Saudi Binladin Group
DHL Express will invest more than $27 mln in infrastructure developments to facilitate its regional expansion plans
A dockyard will be built at the Islamic Port in Jeddah. Estimated project cost is about $430 mln
Another port construction is considered at Ras Al Zour in the Eastern province at a cost of $600 mln
A new petrochemical plant will be built in Al-Jubail Industrial City by South Korean company Daelim Industrial at a cost of about $900 mln

For more information see Saudi Arabia Homeland Security Market Outlook - 2009-2018
Saudi Oil Industry Security Market

The Japanese Market for U.S. Oranges

Market Research Analyst — Mon, 14 Apr 2008 13:59:19 +0000

A recent report from the Economic Research Service of the United States Department of Agriculture analyzes trends in the Japanese market for U.S. oranges. The largest export markets for U.S. oranges are Canada, China, Japan and South Korea. Japan is the third largest market for U.S. oranges. Japan’s domestic production represents the tiny share of the U.S. imports. The U.S. imports of oranges to Japan reached about $70 mln in 2006, or almost 100,000 tons.

Japan was the largest foreign importer of U.S. oranges in the late eighties. U.S. exports of oranges to Japan reached peak in the middle of nineties. Since nineties the demand for the U.S. oranges has been mostly flat. Aggregate U.S. orange exports to all foreign markets are
between 500,000 and 700,000 metric tons per year. Demand for U.S. oranges from Canada, China and South Korea shifted the Japanese market to the third/fourth place.

This report investigates Japan’s orange market, especially consumption, and factors that affect Japan’s imports from the United States.